Labour issues might drive Toyota out of Bangalore

Labour issues might drive Toyota out of state
The Times of India

Toyota’s Indian arm has been hitting the headlines for an altogether different reason. Wage disputes have come back to haunt the Japanese global corporation, and the company is taking a serious view of the matter. It is possible that Karnataka could lose the proposed second plant of Toyota, the number two automobile manufacturer in the world. States like Himachal Pradesh and Uttaranchal are circling the Toyota corporate office with outstanding incentives, Toyota Kirloskar Motor’s deputy managing director K.K. Swamy tells Darlington Jose Hector.

Have you been able to resolve the wage dispute at Toyota? What steps are you taking to ensure the smooth operation of the company in the wake of such a dispute?
Toyota is present in 44 countries globally. In Japan, we are regarded as the best employer in terms of pay packet and general work environment. We are keen to spread that image across all the markets, and it is no different in India. Our principle is that employees should put in their best so that the company can give them the best rewards. According to stipulated norms, we have to pay the general workers around Rs 3,500, but we pay around Rs 15,000. Moreover, we have announced a hike of Rs 2,000.

However there are a few external elements who are persistently trying to create rift among the workers. And we are trying to fight that. Owing to their record of indiscipline, 15 employees had to be suspended. That case is pending enquiry.
But these issues have not affected work at our plant, which is functioning with near 100 per cent efficiency.

Will such disputes have any bearing on the destination of your additional production plant in India?
Till last year, we never even thought about stepping out of the state. Karnataka is our base and we wanted to consolidate here. But with the labour issues raising its head, we have begun to look beyond. That way it is fair to say that these issues may have some bearing on the final decision.

Do you think Toyota has enjoyed the best support of the state government, during its tenure here? Where do you think they have fallen short?
Karnataka has been supportive all through. But it may have to handle the labour issues better. Human resource is an asset and we have to take care of it well. Andhra Pradesh has some good policies on how to take care of these labour issues and Karnataka should emulate it.

What are the chances of Karnataka being chosen as the location for your second plant?
High chances. We have acquired a lot of land here and invested over Rs 1,500 crore for the plant. So we are keen to continue here. But a lot of water has flown under the bridge.

What direction is Toyota taking in India? What are the short and long term goals?
The Indian automobile market is one-million strong. By 2010, it will become two million. Toyota’s target is to capture 10% of the Indian market by 2010. And by 2015, we want to have a share in excess of 15%.